SEC Commissioner Discusses Fintech, Crypto Regulations, and Binance Situation in the Philippines
Kelvin Lee, SEC Commissioner, opens up about the current state of crypto regulations in PH, with a focus on the Binance situation.
- Kelvin Lester Lee, Commissioner of the SEC, discussed updates on the crypto regulatory framework and emphasized the need for investor protection in the Philippines.
- Lee mentioned that the SEC’s cryptocurrency regulation has been renamed the “Digital Asset Security Service Providers Rules.”
- Lee also discussed the situation of Binance, and emphasized multiple advisories of the Commission regarding exchanges.
Kelvin Lester Lee, Commissioner of the Securities and Exchange Commission (SEC), recently discussed the current state of the financial technology (fintech) landscape in the Philippines. Lee touched on the latest updates regarding the Commission’s crypto regulatory framework, short selling, stock trading, and online investment scheme flagging.
He mentioned this during his interview with Business Outlook of ANC:
Cryptocurrency Regulation Updates in the Philippines
Commissioner Lee, who previously revealed that the SEC was about to release its cryptocurrency regulatory framework, which was subsequently canceled due to the collapse of FTX, noted that the delay was aimed at making the rules “more encompassing, trying to make sure that something like the FTX will never happen in the Philippines.”
“Because at the end of the day, it’s about investor protection. We have to make sure the investors here, the Filipino public, the consumers in the Philippines, are protected extensively,” he said.
Lee also revealed that the rules, formerly known as the “DAO and DAX Rules” (Digital Asset Offering Rules and Digital Asset Exchange Rules), have been renamed by the SEC to the “Digital Asset Security Service Providers Rules.”
“The delicate balance between having to balance the needs of the public, protecting the public, and the fast-pace of these innovations. Admittedly some of these innovations can change the game–they can bring some vaunted issuances to the public, but at the end of the day, we have to err on the side of caution, at least from a regulators perspective,” he explained.
Will the SEC Regulate Binance in the Philippines?
When journalist and host Salve Duplito asked about regulating Binance and other applications that allow investors to buy, sell, and trade cryptocurrency, Lee emphasized that the SEC has been actively issuing advisories to the public reminding them to only invest in registered and regulated entities.
“Overall, as a principle, as a policy direction, that’s what we are looking at: regulating this side and helping stabilize it… In theory, that particular entity (Binance), if they want to come into the Philippines and operate legitimately they have to either come to us (SEC) or the BSP (Bangko Sentral ng Pilipinas) later on,” he stated.
In total, the local think tank Infrawatch has submitted five letters to the Philippine financial regulators, advocating for a ban on Binance in the country.
- Infrawatch Urged BSP Anew on Why It Should Ban Binance, Coinbase
- Infrawatch Reports Binance to BSP for Unlicensed Operations Amid Crypto to Bank Feature, Community Meetups
- Infrawatch PH to BSP: Is Backdoor Acquisition of VASP License Allowed?
- SEC Asked by Infrawatch PH to Ban Binance for Illegal Operations
- Infrawatch PH Asks DTI to Suspend and Ban Binance Over Illegal Sales Promotion
Following Infrawatch’s letter, the SEC issued an advisory cautioning the public to not invest with Binance last August 2022.
Short Selling in the Philippine Stock Market
During the interview, Commissioner Lee revealed the short-selling on the Philippine Stock Exchange (PSE) is poised to launche in the fourth quarter of this year.
Last month, the SEC approved the PSE’s plan to introduce short-selling in the market to provide more liquidity–it will initially be limited to the 30 largest stocks included in the PSE index.
Short selling is a trading strategy in which an investor borrows shares of a security and sells them, hoping to buy them back at a lower price in the future. If the price does drop, the investor can buy the shares back at a lower price and return them to the lender, pocketing the difference as profit.
“The short-selling that we are foreseeing is on a fairly limited basis; in a way it’s like a dry run for having a full blown short-selling later on,” he shared.
Regulating Online Investment Schemes in the Philippines
The Commissioner disclosed that the SEC has been in constant contact with Facebook and Google to take down flagged fraudulent entities using these online platforms. He also stressed that the Commission has been posting public advisories on a regular basis.
He further added that through their partnership with Google, Philippine-targeted lending apps that seek to be listed on the Play Store will first be required to meet certain requirements, such as SEC registration, before they can operate.
“There’s only so much that we can do as well, so we want the general public to remember that before you invest your money please check with the SEC, as we always say ‘Check with SEC’. Check with us, find if it’s a legitimate company before you put any money in it,” he stressed.
This article is published on BitPinas: SEC Commissioner Lee tackles the State of PH Fintech Space
Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.
